Aquaflo Distillation Pty Ltd v First National Real Estate Burleigh [2020] QCATA 179

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Aquaflo Distillation Pty Ltd v First National Real Estate Burleigh [2020] QCATA 179 PARTIES: AQUAFLO DISTILLATION PTY LTD (applicant/appellant) v FREEVISTA PTY LTD & HADJAC PTY LTD T/AS FIRST NATIONAL REAL ESTATE BURLEIGH (respondent) APPLICATION NO/S: APL215-19 ORIGINATING APPLICATION NO/S: MCDO255-19 Southport MATTER TYPE: Appeals DELIVERED ON: 19 June 2020 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Howe ORDERS: Leave to appeal granted. Appeal allowed. The decision made 28 June 2019 is set aside. The matter is returned to a differently constituted tribunal for reconsideration with the hearing of additional evidence as deemed necessary by the reconstituted tribunal. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where a real estate agent sued for commission – where the application for commission was resisted on a number of bases including that the agent was not the effective cause of sale – where the buyer had negotiated directly with the seller after the agency ended – where the Adjudicator made inferences from the facts – where the facts did not justify the inferences drawn – where the Adjudicator made an error of law Property Occupations Act 2014 (Qld), s 20 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 -- 1 of 7 -- 2 Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119 Emmons Mount Gambier Pty Ltd v Specialist Solicitors Network Pty Ltd [2005] NSWCA 117 L J Hooker Ltd v W J Adams Estates Pty Ltd [1977] HCA 13 Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2 Pickering v McArthur [2005] QCA 294 REPRESENTATION: Applicant: Self-represented by D Harris Respondent: Self-represented by K Smith APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION [1] The applicant (‘Aquaflo’) owned a property at the Gold Coast and engaged the respondent (‘First National’) as agent to sell it. [2] The agency was exclusive for the period 28 April 2018 to 26 May 2018 and thereafter it continued as an open listing. The property did not sell within that period but it did sell some time later when the buyer (‘Boyce’) contacted the director of Aquaflo, Mr Smith, directly. [3] The purchaser attended on two days when the property was open for inspection arranged by First National, the last held on 16 June 2018. [4] On 21 June 2018 Aquaflo terminated the agency and the property was taken off the market. Some time after that Boyce contacted Mr Smith to enquire whether the property was still for sale. [5] Aquaflo subsequently sold to Boyce and First National asked for its commission under the agency agreement which Aquaflo refused to pay. First National commenced proceedings in the tribunal to recover $24,653.80 commission. [6] The matter was heard before an Adjudicator who found in favour of First National and ordered Aquaflo to pay the commission plus some limited costs. [7] Aquaflo seeks to appeal that decision. [8] Given this is an appeal from a decision made in the Tribunal’s minor civil dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.1 [9] Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.2 1 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(a)(i). 2 Pickering v McArthur [2005] QCA 294. -- 2 of 7 -- 3 [10] Aquaflo claims the decision of the learned Adjudicator was wrong in a number of respects. There are no adequate grounds of appeal set out in the application for leave to appeal, however Aquaflo has filed submissions and the submissions detail various complaints from which it is possible to understand issues raised as grounds of appeal. Open day attendance [11] Aquaflo says there was no evidence to support the claim by First National that Boyce attended an open day at the property during the period of exclusive agency. [12] That is not correct. This was a matter specifically conceded by Smith at hearing.3 There can be no complaint about that now. No adequate email evidence [13] Aquaflo says there was no evidence that First National emailed Boyce a copy of a sales contract as claimed or that Boyce asked for it. The email relied on to evidence that had no date on it and First National did not prove that the email address on the email was Boyce’s. [14] Noting this objection taken by Aquaflo in submissions, First National has asked that another copy of the email be considered as fresh evidence in the appeal. [15] The parties were advised in directions leading up to the hearing of the application for leave to appeal that if they wished to rely on fresh evidence they must file an application to that effect. First National did not do that. Instead it simply appended another copy of the email to its submissions. [16] Perhaps the further copy email now sought to be relied on is simply a better copy of the email tendered at the hearing below. It has some differences. Regardless, the better copy should have been available for use before the learned Adjudicator at hearing. It is not available as fresh evidence in the appeal process. [17] Nor is the other material sought to be relied on for the first time in the application for leave to appeal, such as an open house feedback form dated 5 May 2018. All the documents existed at the time of hearing below and should have been made available then. There is no explanation offered why they were not made available at the hearing below. [18] They do not fall into the category of fresh evidence appropriately available for consideration on appeal. [19] But regardless of that, I note the original undated email referred to at the hearing before the learned Adjudicator said: Hi Geoff I have attached a copy of contract for 807 Tallebudgera Creek Rd Tallebudgera Valley Cheers Sent from my iPad Begin forwarded message: From: “David Andrews” 3 Transcript 1-14 Line 14. -- 3 of 7 -- 4 [20] The email address used there was the same address as that used for Boyce in the final contract drawn by independent solicitors, not First National. [21] Also at hearing Mr Smith said: The only thing he (Boyce) received from them was a contract – an open-ended contract by email, I believe, on 16th June.4 [22] As to whether Boyce asked for a contract, Mr Harris for First National gave evidence at the hearing that Boyce asked for a contract and his evidence was not challenged. [23] The learned Adjudicator was entitled to find there was a contract forwarded to Mr Boyce’s email address by First National and that it was forwarded at his request. Effective cause of sale [24] The significant complaint made by Aquaflo however is that the learned Adjudicator erred in concluding First National was the effective cause of sale to Boyce. [25] Aquaflo says in its written submissions that it was within its rights to terminate First National’s agency and the effect of the termination “should have been interpreted according to ordinary principles applicable to contracts and therefore should have been taken as a relevant consideration in respect of the Applicant’s commission obligations”. [26] Included in the contractual obligations however is the owner’s obligation to pay the agent commission in certain stated circumstances, including where the agent is the effective cause of sale, within or after the term of the agency. By clause 5.1 of the agency agreement: 5.1 The client agrees to pay the Agent Commission as specified in Part 7 of the Appointment of Property Agent if a Contract of sale of the Property is entered into with a Buyer, whether within the Term or after the Term, where the Relevant Person is the effective cause of the sale within the Term, provided that: 5.1.1 the Contract of sale of the Property is completed … 5.2 For the purposes of Clause 5.1 a Relevant Person is, where the Appointment of Property Agent is for: 5.2.1 an Exclusive Agency, any person (including the Client); or … 5.2.3 an Open Listing, the agent only. [27] This clause reflects relevant prescribed provisions of the Property Occupations Act 2014 (Qld).5 [28] Key to entitlement is the agent being the effective cause of sale. What that means was explained in Emmons Mount Gambier Pty Ltd v Specialist Solicitors Network Pty Ltd:6 4 T1-9 L23. 5 Section 20. 6 [2005] NSWCA 117. -- 4 of 7 -- 5 It is trite to say that for the respondent to succeed there has to be established a causal connection between the agent’s efforts and the completion of the transaction (Burchell v Gowrie [1910] AC 614). To prove this it has to be established that the agent was an effective cause of the sale. Putting it another way, that the sale was brought about by the agent’s instrumentality (Ryan v Horton [1911] HCA 10; (1911) 12 CLR 197).7 [29] Whether a real estate agent is the effective cause of sale is a question of fact in every case.8 The onus of proving the agent was the effective cause of sale lies on the agent.9 [30] Simply making an initial introduction of the buyer to a property may not be enough:10 The notion of "effective cause" reflects the requirement expressed in a long line of cases that it is not enough that the engagement of the agent to find a purchaser or to introduce a purchaser was a step without the taking of which the sale would not have been effected. Something more immediate is required if the criterion of contractual liability is to be satisfied. This is because, as McPherson J put it in Doyle v Mount Kidston Mining and Exploration Pty Ltd, it would be "quite artificial to suppose that the parties intended that the agent should earn his commission simply by finding or locating an individual who, independently of any further action by the agent, later agreed to buy the subject property".11 [31] It was not disputed that Boyce met Mr Smith of Aquaflo independently of First National in September 2017 before the property was listed for sale. Mr Boyce was interested in buying but the property was not for sale then. Mr Smith showed Boyce around the property. [32] It was also not disputed that Boyce attended two open house days conducted by First National. On the first, the listed price for the property was $1.6M. Boyce made no offer. [33] Prior to the second open day he was given a copy of a bare contract for the property with only the vendor’s details, the real property description and a price of $1.4M noted. Boyce’s name was not noted on the contract as purchaser. [34] Boyce came to the second open day but made no offer. There is no evidence that First National had any discussions or conducted any negotiations with Boyce at the open day or had any contact with him after that. [35] The exclusive agency ended on 26 May 2018. On 21 June 2018 First National’s open agency was terminated. [36] Boyce contacted Mr Smith again in very late July 2018 because he had noticed the property was not listed on the internet. According to Mr Smith, Mr Smith then negotiated a sale of the property to Boyce for $1.375M. [37] The learned Adjudicator said: I find as a matter of fact that First National Real Estate Burleigh was the effective cause of sale. Without the actions taken by First Nation Burleigh at the time they did, Boyce would have never known this property was for sale. 7 Ibid, [39]. 8 L J Hooker Ltd v W J Adams Estates Pty Ltd [1977] HCA 13, [4] (Gibbs J). 9 Emmons Mount Gambier Pty Ltd v Specialist Solicitors Network Pty Ltd [2005] NSWCA 117, [39]. 10 Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2. 11 Ibid, [82] (Gummow J). -- 5 of 7 -- 6 He only knew it was for sale because of the actions that they took and upon the actions that they took, he then engaged in the process of purchase, by walking down the road, by meeting, by requesting a contract of sale, getting the contract of sale and realising what the details were, how big, how much, all those details that are on a purchase contract. And then, after that, he reattended, by engaging in the sale process with First National Burleigh. Then the agency is terminated. That does not matter. You can do that. But then Boyce immediately – immediately – turns up and purchases the property at precisely the same figure that Smith would have got had he sold it with First National , except that he got the benefit of taking off the commission, at 1.375.12 [38] The learned Adjudicator found that Boyce immediately contacted Smith after the agency was terminated. He had been given the contract showing a price of $1.4M. It seems clear from his reasons given that the learned Adjudicator drew the inference from the evidence that Boyce waited until after the agency terminated to buy the property to save himself $25,000 off the price. [39] However Boyce did not immediately contact Smith after the agency was terminated. Approximately six weeks passed before Boyce approached Smith. Mr Smith’s evidence was that Boyce had left Queensland to go to Melbourne after the second open day because of the death of a family member. That was not contested at hearing. [40] The price of $1.4M was no secret. That was the reduced price for the property at the time of the second open day when the agency was drawing to a close. Mr Harris agreed that was the last marketed or listed price.13 [41] The uncontentious facts of the matter did not justify the inference drawn by the learned Adjudicator, and one must suspect in large part prompting him to conclude that the agents were the effective cause of sale, that Boyce waited just over five days for the agency to be terminated before approaching Aquaflo to gain a saving of $25,000 off the price. [42] A decision based on inferences which are not justified by the facts constitutes an error of law:14 87. The question whether there is any evidence of a particular fact is a question of law: McPhee v. S. Bennett Ltd. (1934) 52 WN(N.S.W.) 8, at p 9; The Australian Gas Light Co. v. The Valuer-General (1940) 40 SR(NSW) 126, at pp 137-138. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law: Australian Gas Light, at pp 137- 138; Hope v. Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1, at pp 8-9. This is because, before the inference is drawn, there is the preliminary question whether the evidence reasonably admits of different conclusions: Federal Commissioner of Taxation v. Broken Hill South Ltd. [1941] HCA 33; (1941) 65 CLR 150, at pp 155, 157, 160. So, in the context of judicial review, it has been accepted that the making of findings and the drawing of inferences in the absence of evidence is an error of law: Sinclair v. Maryborough Mining Warden [1975] HCA 17; (1975) 132 CLR 473, at pp 481, 483.15 12 T1-18 L16-28. 13 T1-11 L9-35. 14 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 355-356; see Bartlett v Contrast Constructions Pty Ltd [2016] QCA 119, [53] where the various authorities are listed. 15 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, [87]. -- 6 of 7 -- 7 [43] The learned Adjudicator drew an unjustifiable inference in reaching the decision he did and he has thereby fallen into error. The error must be corrected. [44] Leave to appeal is granted and the appeal allowed. The decision of the learned Adjudicator is set aside. [45] At the hearing First National suggested that the evidence of Boyce had been the subject of discussion in the tribunal before another Adjudicator prior to hearing and that in the course of discussions with the Adjudicator a suggestion was made that Boyce’s evidence was “not necessarily relevant”. Accordingly he was not called. That seems most unusual and rather unlikely. His evidence would clearly have been relevant and perhaps significant weight attached to it. [46] In the circumstances the appropriate course is to return the matter to the tribunal for reconsideration with the possibility of taking more evidence. The reconsideration should be by a different Adjudicator. -- 7 of 7 --